At the time of our exit, Dental Care Alliance (“DCA” or the “Company”) was a leading multi-branded dental services organization (DSO), occupying the top position in the Mid-Atlantic region, based on geographic density, as well as a top three position in both Florida and Georgia. At the time of our investment, the dental industry was large, fragmented and in the early stages of consolidation. We viewed DCA as a strong platform to consolidate the industry due to its (i) experienced management team, (ii) regional density in the mid-Atlantic, Florida and Georgia, (iii) proven record of above average same store revenue growth and cash flow generation and (iv) significant investment in infrastructure and scalable business model. At the time of our investment, the founder was transitioning out of the Company, and management was looking for a financial partner to both facilitate an ownership recapitalization and provide corporate development expertise and capital for acquisitions. Management maintained significant ownership in the business alongside Quad-C.
With the support of Quad-C, management executed on the value creation plan, which included:
Closing 18 tuck-in affiliations and two regional affiliations. The regional affiliations, Towncare Dental and Imagix Dental, added 49 offices in FL and 9 offices in GA, respectively.
Completing the Towncare Dental integration and increasing EBITDA 50%+ due to sizable synergies.
Expanding pediatric/orthodontic offices under the successful Main Street brand through de novos and office conversions.
Strengthening the compliance program to ensure clinical quality.
Expanding the centralized customer contact center.
Investing heavily in search engine optimization (“SEO”) and social media marketing.
As a result, DCA significantly expanded its footprint as the business doubled in size under Quad-C’s ownership.
Given the strong organic growth and accretive acquisitions, management exceeded its growth plan and in July 2015 Quad-C sold DCA to a private equity group.